As chief executive Andy Vesey outlined last week, the venture is moving ahead in the development pipeline, with Crib Point at Western Port in Victoria
beating rival options in NSW and South Australia as the preferred site.

But not all are on board with Mr Vesey's view that the project is a "game-changer" for the east coast market, and the timing of a final investment
decision in 2019 leaves plenty of room for the market to move against the venture.

Even in today's market, with weak Asian LNG prices and soaring prices on the east coast, some believe the economics don't stake up.

AGL wholesale markets chief Richard Wrightson cited prices of $8-$10 a gigajoule for gas imports if the facility were in existence today.

Distribution costs

But adding in distribution costs and a retail margin, prices could still approach $12, depending on the location of a customer, sources say. That's
less than the $15-$20 a gigajoule some manufacturers have faced this year, but more than many in the market could bear.

"We remain dubious with the cost at $8-10 a gigajoule," Macquarie Securities said.

"The final investment decision is not before FY19, which means spend of FY20-FY21. In that time the potential is for other gas solutions to defer the
decision."

Others disagree. Credit Suisse analyst Mark Samter sees a "material opportunity" for those that can import LNG into the south-east, most obviously
AGL, but also potentially others.

At an oil price of $US60 a barrel, that netback price allows LNG to be imported into Victoria at a price that is more than $2.50 a gigajoule below
the price of gas transported from Queensland, according to Credit Suisse's calculations.

"What we do feel ever stronger about is that importing LNG into the southern states is rational at every level (economically, politically and from
a security of supply perspective)," Mr Samter's team told clients in a note.

Warm support

The project has received warm support from the Andrews Labor government in Victoria even as the government retains its ban on developing onshore gas.
The state government promised to work closely with AGL "to ensure approvals processes are streamlined to avoid unnecessary delays and to bring
relief to all Victorian gas consumers as quickly as possible".

AGL is yet to kick off the formal environmental approvals process for the venture as it focuses on community consultation at Crib Point, an industrial
site with an existing jetty and pipeline easements. Also yet to be decided is the type of LNG import facility, although a spokesman said it would likely be a "FSRU", or floating storage regasification unit, a ship-style floating terminal that could be leased
rather than bought.

"We will issue a tender towards the end of the year and let the market decide," the spokesman said.

A new pipeline about 55 kilometres long would likely be needed to connect the terminal to the grid, with a competitive tender also to be held for that,
he said.